It wasn’t that long ago that us equity release stakeholders were celebrating lending of over £1bn in one year; now we stand on the verge of our first £1bn quarter and, judging by activity levels, I’d be very surprised if this figure wasn’t surpassed in quarter three.
The council’s latest figures show lending activity at £971m for Q2 this year, up 12% on the previous quarter, and 39% on the same three-month period last year.
Customer numbers show the rapid advance in demand, with 20,326 taking out an equity release product, that’s a 27% year-on-year increase.
For those that might well point out the still small nature of the equity release market, we are now looking at a quadrupling of yearly business within just a few short years.
Additionally, all the underlying demographics which underpin demand look unlikely to go away anytime soon – if anything they will solidify, meaning an increased interest and acceptance that equity release can support the needs of those in later life.
If advisers are not seeing more and more interest from later life customers – not just around equity release but retirement interest-only and mainstream loans for older borrowers – then I would be very surprised.
A living inheritance
The type of growth we are seeing here with the equity release market is simply the iceberg you can see above the water.
Beneath the surface there is a much bigger potential marketplace who understand the family home is not sacrosanct.
Of course, we have dealt with a generation who were worried about not being able to bequeath their homes to their families if they took out products, but clearly this isn’t an issue now.
If they want to both take out money from the home and still be able to deliver it as part of their estate, then they can do this.
They can also provide that living inheritance which is becoming increasingly important to many people – why wait to give money to a child when you won’t be there to see them benefit from it? Many more homeowners want to help and want to be around to see that help take full effect.
Watering down of advice
Advisers have of course the pivotal role in this.
There has been some talk about the watering down of advice in both the Financial Conduct Authority’s interim Mortgages Market Study report and perhaps in terms of lenders not insisting advisers have an equity release qualification.
However, I’m of the opinion that those who cover all later life lending bases are the ones that will see the greatest benefit.
Clients will want to know they have been recommended a product from across the entire market, not just from one area, and those advisers who can market themselves as full later life lending specialists could end up with some significant business volumes to deal with.
Certainly, when it comes to both equity release and later life lending, this is a market with limitless potential.
